Adopted! Exposure Draft of the New Company Law for the Registered Capital Rules

Previously, the State Administration for Market Regulation released a Provisions of the State Council on Implementing the Registered Capital Registration Management System of the Company Law of the People’s Republic of China (Exposure Draft). 

On 7 June 2024, the Exposure Draft was adopted during an executive meeting of the State Council chaired by Li Qiang.

The meeting pointed out that improving the registered capital registration management system is necessary to implement the requirements of the Newly Revised Company Law (the Law) and optimize the business environment. It is necessary to steadily promote the stock of companies to adjust the capital contribution period and other policies, guide the company to regulate the shareholders to perform their capital contribution obligations following the law, optimize the registration services, do well for publicity and interpretation, and continue to create a high-level business environment.

We’ve shared several points of this Exposure Draft in our article, you can find more details on our website: https://www.serviceonnewgrounds.com/35-exposure-draft-on-transition-period-for-registered-capital/

Below we revisit the specifics of the Transition Period for registered capital.

Article 3 A three-year transition period shall be set: from 1 July 2024 to 30 June 2027.

-All companies established before the implementation of the Law whose capital contribution period exceeds the period stipulated in the Law shall be adjusted during the transitional period.

-A limited liability company established before the implementation of the Law where the remaining contribution period is less than five years from 1 July 2027, no adjustment of the contribution period is required.

-A limited liability company established before the implementation of the Law where the remaining contribution period exceeds five years from 1 July 2027, the remaining contribution period shall be adjusted to within five years within the transitional period.

-A joint stock company established before the implementation of the Law shall pay the full amount of the subscribed shares within the transitional period of three years.

All adjustments, the term of capital contribution by shareholders, etc. shall be recorded in the articles of association and shall be disclosed to the public on the national enterprise credit information disclosure system in accordance with the Law.

We are half a month away from the implementation date (1 July 2024) of the new Companies Law. Please pay close attention to the enactment of the new policy and read the contents of the official law carefully. The final basis of implementation must follow the official law enacted by the state.

If you have any questions, please contact us.